Global IT spending to reach $3.5 trillion in 2017

Worldwide IT spending will surpass $3.5 trillion in 2017, according to a new report by Gartner. The factors driving the growth will be software and IT services, says the research company.

Speaking at a recent symposium, Gartner experts said that the forthcoming British exit from the European Union has actually led to an increase in IT spending.

John-David Lovelock, research vice president at Gartner, says: “The immediate impact of Brexit has caused modest growth in IT spending to turn negative for 2016.

“Without the UK, global IT spending growth would have been modestly positive at 0.2 percent in 2016, but with the UK included, IT spending is expected to decrease 0.3 percent. The immediate impact of the British pound will also cause the IT spending patterns to shift as prices for IT will increase.”

Gartner’s research indicates that software spending is likely to grow by 6 per cent in 2016, and another 7.2 per cent in 2017 to a total of $357 billion.

Spending on IT services, meanwhile, is on track to grow 3.9 per cent to $900 billion in 2016, and rise 4.8 per cent to $943 billion in 2017.

Here is a bar chart created using some of the data collected by Gartner.

Source: Gartner

Lovelock says: “We see software and IT services spending in Germany and France increasing, while UK services stay relatively flat.

“There are other countries, such as the Netherlands, Luxembourg and Ireland that are also increasing their IT spend to contend as a viable alternative to banks in the UK. We are seeing examples of many banks in talks with these countries to examine the possibility of moving their operations outside of the UK.”

Lovelock adds that Gartner has considered the impact of the US presidential elections, although it did not find any evidence that they will make any difference.

Lovelock says: “We have also taken into account the US presidential race, as well as a potential rate cut by the Federal Reserve. Typically, there is a slight pause in IT spending leading into the election, and then a relief in spending, subsequently.

“However, trends have shown that IT spending in the US is not dependent on presidential leadership, so neither candidate should have a significant impact on IT spending in the near-term.”

Gartner says its research is the result of “analysis of sales by thousands of vendors across the entire range of IT products and services”.